Take Home Quiz Draft Answer Key

Under Aty. Porfirio Panganiban

Labor Law Review Thursday 6-9pm
1. What are the constitutional provisions that are not applicable to labor cases?

Certain constitutional rights and precepts may NOT be invoked in labor cases, particularly in
company-level administrative investigations leading to the termination of employment
because they can only be asserted against the government or the state but not against a
private party like an employer. More particularly, the following rights, per well-entrenched
jurisprudence, generally find no application in company-level administrative proceedings by
the employer against an erring employee:

(a) Right to due process;

(b) Right to equal protection of the laws;
(c) Right against self-incrimination;
(d) Right to counsel and to remain silent; and
(e) Right against unreasonable searches and seizures and to privacy of communication
and correspondence.
(Chan, Bar Reviewer on Labor Law, 2017)

2. Explain the concept of social justice

The intent of the pertinent labor laws is to balance the scale of justice; to put the two parties
on relatively equal positions. There may be cases where the circumstance warrant favoring
labor over the interest of management but never injustice to the employer (Abad,
Compendium on Labor Law, 2009)

When social justice collides with the equal protection clause, the law should accord more
sympathy and compassion to the less privileged workingman. This is only fair if the worker is to
be given the opportunity and the right to assert and defend his cause, not as a subordinate,
but as part of management with which he can negotiate on even plane, thus, labor is not a
more employee of capital but its active as equal partner. (Fuentes vs. NLRC, 266 SCRA 24)

Under the policy of social justice, the law bends over backwards to accommodate the
interest of the working class the humane justification that those with less privilege in life
should have more privileges in law. (Ditan vs. POEA, et al G.R. No. 79560, 3 December 1990)

3. What is the minimum wage prescribed by law for persons with disability?

a. 50% of the applicable minimum wage

b. 75% of the applicable minimum wage
c. 100% of the applicable minimum wage
d. the wage that the parties agree upon, depending on the capability of the
disabled.
e. the wage that the parties agree upon, depending on the capability of the
disabled, but not less than 50% of the applicable minimum wage
4. According to Article 78 of the Labor Code, a handicapped worker is one whose earning
capacity is impaired by the following, except:

a. Age;
b. Physical Deficiency;
c. Mental Deficiency;
d. Psychological Deficiency.

5. ABC Corp. hired Ms. Bab as accountant and corporate secretary, though she was not
entrusted with corporate documents; neither did she attend any board meeting. She later on
was designated as an Acting Manager to handle recruitment of employees, to represent
company in all dealings with government agencies and to administer all other matters
pertaining to operation of ABC Corp. The company made a report to the SSS. She was later

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Under Aty. Porfirio Panganiban
Labor Law Review Thursday 6-9pm
on replaced by Ms. Ceb as Manager. Since Ms. Bab received no salary because the
company was not earning well. She served the company for 6 years. Ms. Bab then filed an
action for constructive dismissal. ABC Corp. averred that Ms. Bab is not an employee of the
company. Was employer-employee relationship present?

Yes. By applying the control test, Ms. Bab is an employee of ABC Corp. because she was
under the direct control and supervision of the said company. She reported for work
regularly and served in various capacities as Accountant, Corporate Secretary and Acting
Manager. She rendered accounting and tax services to the company and performed
functions necessary and desirable for the proper operation of the company. Further, under
economic test, she served for 6 years and received salaries. The coverage of Social
Security Law is predicated on the existence of an employer-employee relationship.
(Francisco v. NLRC, GR No. 170087, Aug. 31, 2006)

6. Mr. Man was hired under a talent contract duly prepared by QWR, as a newscaster and co-
anchor for QWR’s early evening news program. The contract was for a period of 3 months. It
was renewed 15 times within 4 years. Upon expiration of his last talent contract, he informed
QWR his desire to renew but he received no reply. He considered it as a constructive
dismissal.

a. Was Mr. Man a fixed-term employee of QWR?

b. Was Mr. Man a regular employee?

a. No. Employer-employee relationship was created when QWR started to merely rebew the
contract repeatedly 15 times for 4 years. Mr. Man was a regular employee. However, the
practice of having fixed-term contracts in the industry does not automatically make all
talent contracts valid and compliant of labor law. Desiring to keep his job as a broadcasting
practitioner, he was left with no choice but to affix his signature on each renewal as already
prepared by QWR.

b. Mr. Man‟s work was necessary o desirable in the usual business or trade of the employer.
His work was continuous for a period of 4 years. The repeated engagement under contract
of hire is indicative of the necessity and desirability of Mr. Man‟s work in QWR‟s business.
(Dumpit v. CA, GR No. 164652, June 8, 2007)

7. Pedro was hired as a truck driver of Mags Packaging Inc. He was paid on a per-trip basis
and was provided gate passes. Pedro requested to avail himself of the benefits that a regular
employees were receiving but it was denied. Pedro then filed before NLRC a complaint for
regularization. Then he was dismissed by the company.Did employer-employee relationship
exist?

Yes. Following the four-fold test, Mags Packaging Inc. engaged the services of Pedro
without intervention of a third party. Payment on a per-trip basis is merely a method of
computing compensation and not a basis for determining the existence or absence of
employer-employee relationship. Power to dismiss is inherent in this case. Pedro is subject to
the control of the company. The company owned the truck. Also, the company issued to
Pedro gate passes indicating that the company instructed on when and where Pedro
would perform his task. (Chavez v. NLRC, GR No. 146530, Jan. 17, 2005)

8. 116 individuals occupied positions of Technical Staff, Unit Manager, Section Manager,
Department Manager, Division Manager and Vice President in a mill site of Popor Inductries
in Mindanao. Due to a major financial setback, Popor Industries undertook a retrenchment
program. These 116 individuals received separation pay computed at rate of 1 month basic

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Under Aty. Porfirio Panganiban
Labor Law Review Thursday 6-9pm
pay for every year of service. Believing that the allowances they regularly received on a
monthly bases during their employment should have been included in the computation, they
lodged a complaint for separation pay differentials.

Are allowances included in the definition of “facilities,” being necessary and indispensable
for their existence and subsistence?

No. The receipt of allowances on a monthly basis does not ipso facto characterize it as
regular and forming part of salary because of the nature of the grant is a factor worth
considering. They received the allowances temporarily. They wrongly believed it as regularly.
Their allowances do not represent fair and reasonable value simply because their allowance
and transportation allowance were amounts given by the company in lieu of actual
provisions for housing and transportation needs whereas the Mindanao allowance was given
in consideration of being assigned to hostile environment then prevailing in Mindanao.
(Millares et al v. NLRC, GR No. 122827, March 29, 1999)

9. Indian Printer Corporation is engaged in manufacture of printers and inks. There are 2 unions
in the company, Indian A and Indian B. The 2 unions filed action for voluntary arbitration.
They alleged that the company suddenly withdrew and denied certain benefits and
entitlements which they have long enjoyed. Among these are service award, 35% premium
pay of employee’s basic pay for work rendered during Holy Monday, Holy Tuesday, Holy
Wednesday, Dec. 23, 26, 27, 28, and 29 and Christmas Party and Promotional Increase.Did
the company violate the prohibition against elimination or diminution of benefits?

No. Certain benefits and entitlements are considered bonuses. A bonus can only been
enforceable and demandable if it has ripened into a company practice. It must also be
expressly agreed by the employer and the employee or it must be on a fixed amount. The
assailed benefits were never agreed nor incorporated in the CBA. Since all the benefits are in
the form of bonuses, they are neither enforceable nor demandable. (American Wire & Cable
Daily Rated Employees v. American Wire and Cable Co. Inc., GR No. 155059, April 29, 2005)

10. Bab, Beb and Bob are drivers of jeepney owned by Ver. They are paying P400/day for their
boundary. The excess were given back to the 3 drivers. Later on, they were required to pay
additional P50 for the police protection, car wash and garage fees. The 3 refused. Thus, they
were dismissed. They sued Ver for illegal dismissal.

Was there an employer-employee relationship between Bab, Beb, and Bob and Ver?

Yes. The fact that they do not received fixed wages but get only that in excess of the so-
called boundary is not sufficient to withdraw the relationship between them.
(Gabriel v. Bilon, GR No. 146989, Feb. 7, 2007)

11. ZXC Inc. filed with DOLE a clearance to terminate the services of Ms. Hen and 2 others due to
financial losses. The 3 employees argued that they should be granted a separation pay.
Each of the is receiving monthly salary of P40,000 with commissions for every sale they
made.

Was the contention of the employees correct: earned sales commission and allowances be
included in the monthly salary for purpose of computation of separation pay?

Yes. The nature of the work of a salesman and the reason for such type of remuneration for
services demonstrate clearly that the commission are part of the employee‟s salary and
wage. The commissions are earned by actual market transactions attributable to the
employee. (Songco v. NLRC, GR No. L-50999, March 23, 1990)

12. Corporation X is owned by L’s family. L is the President. M, L’s wife, occasionally gives loans
to employees of Corporation X. It was customary that loan payments were paid to M by
directly deducting from the employees’ monthly salary. Is the practice of directly deducting
payments of debts from the employees’ wages allowed?

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Labor Law Review Thursday 6-9pm

Two possible answers:

a. No, because Article 116 of the Labor Code absolutely prohibits the withholding of wages
and kickbacks. Article 116 provides for no exception.

Basis: ART. 116. The Labor Code of the Philippines, as amended.

b. Yes, because where the employee is indebted to the employer, it is sanctioned by the law
on compensation under Art. 1706 of the Civil Code.

13. Because of the stress in caring for her 4 children, Mary suffered a miscarriage late in her
pregnancy and had to undergo an operation. In the course of the operation, her ob-gyne
further discovered a suspicious looking mass that required the subsequent removal of her
uterus. After surgery, her physician advised Tammy to be on full bed for 6 weeks. Meanwhile,
the biopsy of the sample tissue taken from the mass of Mary’s uterus showed a beginning
malignancy that required an immediate chemotherapy once a week of 4 consecutive
weeks.

a. What benefits can Mary claim under existing social legislation?

b. What can John, Mary’s second husband and the father of the two younger children, claim
as benefits under the circumstances?

a. Assuming she is employed, Mary is entitled to a special leave benefit of two months with
full pay pursuant to R.A. 9710 or the Magna Carta of Women. She can also claim Sickness
Leave benefit in accordance with the SSS Law.

b. Under R.A. 8187 or the Paternity Leave Act of 1996, John can claim paternity leave of
seven days with full pay if he is lawfully married to Mary and cohabiting with there at the time
of the miscarriage.

14. What are the criteria that may be used to determine existence of company practice?

The following are the criteria that may be used to determine existence of company practice:

a. The act of the employer has been done for a considerable period of time;

b. The act should be done consistently and intentionally;

c. The act should not be a product of erroneous interpretation or construction of a

doubtful or difficult question of law or provision in the CBA.

Basis:

Davao Fruits Corporation vs. Associated Labor Unions, (G.R. No. 85073, August 24, 1993)

Standard Chartered Bank vs. Standard Chartered Bank Employees Union (G.R. No. 161933,
April 22, 2008)

TSPIC Corp. vs. TSPIC Employees Union (G.R. No. 163419, February 13, 2008)

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Take Home Quiz Draft Answer Key
Under Aty. Porfirio Panganiban
Labor Law Review Thursday 6-9pm

15. When are Seasonal Employees considered as Regular Employees?

I. When there is reasonable connection between the particular activity performed

by the employee in relation to the usual trade or business of the employer; and
II. Seasonal workers who are repeatedly engaged to perform the same tasks for
more than one season. (Manila Hotel vs. CIR, 9 SCRA 184, 1963)

Note: One-year duration on the job is pertinent in deciding whether a casual employee
has become regular or not. [Phil Tobacco Flue-curing & Redrying Corporation v. NLRC
(1998)]

16. Is the contractor a necessary party in a case where labor contracting is the main issue and
labor-only contracting is found to exist?

a. Yes, the contractor is necessary in the full determination of the case as he is the
purported employer of the worker;
b. Yes, no full remedy can be granted and executed without impleading the
purported contractor;
c. No, the contractor becomes a mere agent of the employer-principal in labor
contracting;
d. No, the contractor has no standing in a labor contracting case.

17. With respect to legitimate independent contracting, an employer or one who engages the
services of a bona fide independent contractor is:

a. An indirect employer, by operation of law, of his contractor‟s employees; he

becomes solidarily liable with the contractor not only for unpaid wages but also
for all the rightful claims of the employees under the Labor Code;
b. Treated as direct employer of his contractor‟s employees in all instances; he
becomes subsidiarily liable with the contractor in the event the latter fails to pat
the employee‟s wages and for violation of labor standards laws;
c. An indirect employer, by operation of law, of his contractor’s employees; he
becomes solidarily liable with the contractor only in the even the latter fails to pay
the employees’ wages and for violation of labor standard laws;
d. Treated as direct employer of his contractor‟s employees in all instances; the
principal becomes solidarily with the contractor not only for unpaid wages but
also for all the rightful claims of the employees under th Labor Code.

18. When is bonus demandable and enforceable?

The general rule is that bonus is not demandable and enforceable. It becomes demandable
and enforceable under any of the circumstances:

a. When it is stipulated in an employment contract or CBA;

b. When the grant of bonus is a company policy or practice;
c. When it is granted as an additional compensation which the employer agreed to
give without any condition such as success of business or more efficient or more
productive operation and thus, must be deemed part of wage or salary; hence,
demandable.

It thus becomes demandable and enforceable only when it is made part of the wage or
salary or compensation. When considered as part of the compensation and therefore,
demandable and enforceable, the amount is usually fixed. But if the amount of bonus is
dependent upon the realization of profits, the bonus is not demandable and
enforceable.

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Take Home Quiz Draft Answer Key
Under Aty. Porfirio Panganiban
Labor Law Review Thursday 6-9pm

19. The most important factor in determining the existence of an employer-employee

relationship is the:
a. Power to control the method by which employees are hired and selected;
b. Power to control the manner by which employees are transferred from one job site to
another;
c. Power to control the results achieved by giving guidelines to the employees;
d. Power to control the results to be achieved and the employee‟s method of achieving
the task.

(Abante vs. La Madrid Bearing Part Corp., 430 SCRA 368, 2004)

20. Define and explain “management prerogative” as well as its limitations

Management prerogative simply means that except as otherwise limited by special laws, an
employer is free to regulate, according to his own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, time, place, and manner
of work, tools to be used, processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, lay-off of workers and discipline, dismissal
and recall of workers.

The following are the limitations on the exercise of management prerogative:

1. It must be exercised in good faith;

2. It must not be tainted with unfair labor practice;
3. The exercise of management prerogative must be within the limitations set by law;
4. It must also be within the limitations set by the Collective Bargaining Agreement; and
5. The exercise must be consistent with the principles of fair play and justice.

21. The constitution promotes the principle of shared responsibility between workers and
employees preferring the settlement disputes through:

a. Compulsory arbitration
b. Collective bargaining
c. Voluntary modes, such as conciliation and mediation
d. Labor-management council

22. Distinguish Article 1702 of the Civil Code from Article 4 of the Labor Code, as amended.

Article 1702 of the Civil Code provides that all labor legislation and labor contracts should
be construed in favor of the safety and decent living for the laborer; and
Article 4 of the Labor Code states that all doubts should be resolved in favor of labor.

Article 4 of the Labor Code enunciates the time honored principle that all doubts in the
implementation and interpretation of its provisions should be resolved in favor of labor. This
rule applies not only in the interpretation of the provisions of Labor Code but also its
Implementing Rules. It applies to all workers –whether in the government or in the private
sector – in order to give flesh and vigor to the pro-poor and pro-labor provisions of the
Constitution.
Thus, when conflicting interests of labor and capital are to be weighed on the scales of
social justice, the heavier influence of the latter should be counter-balanced by sympathy
and compassion the law must accord the underprivileged worker. In interpreting the
protection to labor and social justice provisions of the Constitution and the labor laws or rules
and regulations implementing the constitutional mandates, the liberal approach which
favors the exercise of labor rights should always be adopted.
Compared to the provision of the Labor Code, it appears that Article 1702 of the Civil Code
is broader in scope as it pertains to “all labor legislation and all labor contracts” and not
merely to the “implementation and interpretation of the provisions of the Labor Code,
including its Implementing Rules.” Moreover, the Civil Code mentions a standard which
would justify the invocation of the rule of interpretation in favor of labor in that the same
should be done “in favor of the safety and decent living for the laborer.”

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Under Aty. Porfirio Panganiban
Labor Law Review Thursday 6-9pm
It may be said that the provisions of the Civil Code and the Labor Code do not really differ in
essence since the policy of the law is clar – any dount should always be interpreted or
construed in favor of labor. (Chan, Bar Reviewer on Labor Law, 2017)

23. Enumerate the policies enshrined in Section 3, Article XIII of the Constitution that are not
covered by Article 3 of the Labor Code.

(1)All workers shall have the right to peaceful concerted activities

(2)The right to strike in accordance with the law
(3)All workers shall be entitled to a living wage
(4)Workers shall participate in policy and decision making processes affecting their rights
and benefits as may be provided by law
The state shall promote the principle of shared responsibility between workers and
employers. (Chan, Bar Reviewer on Labor Law, 2017)

24. Complaints had worked five (5) years as waitresses in a cocktail lounge owned by the
respondent. They did not receive any salary directly from the respondent but shared in all
service charges collected for food and drinks to the extent of 75%. With respondent's prior
permission, they could sit with and entertain guest inside the establishment and appropriate
for themselves the tips given by guests. After five (5) years, the complaints individual shares
in the collected service charges dipped to below minimum wage level as a consequence
of the lounge's marked business decline. Thereupon, complaints asked respondent to
increase their share in the collected service charges to 85% or the minimum wage level,
whichever is higher. Respondent terminated the services of the complainants who
countered by filing a consolidated complaint for unlawful dismissal, with prayer for 85% of
the collected services or the minimum wage for the appropriate periods, whichever is
higher. Decide.

Art. 138 of the Labor Code provides as

follows:
―art. 138. Classification of certain
women workers. – any woman who is permitted or suffered to work, with or without
compensation, in any night club, cocktail lounge, massage clinic, bar or similar
establishment, under the effective control or supervision of the employer for a substantial
period of time as determined by the Secretary of Labor, shall be considered as an
employee of such establishment for purposes of labor and social legislation.‖ Since
complainants are under theeffective control and supervision of respondent, they are
therefore considered as employees and entitled to full backwages based on the minimum
wage for the appropriate period plus 85% of the collected service charges.

25. Distinguish Labor-Only contracting and Job-Only contracting.

Labor-only contracting: The contractor has substantial capital or investment in the form of
tools, equipment, machineries, work premises, among others, and the employees of the
contractor are performing activities which are directly related to the main business of the
principal (Sy, et al v. Fairland Knitcraft Co., Inc., G. R. Nos. 182915 &189658, December 12,
2011)
Legitimate Job Contracting: The contractor has substantial capital and investment in the
form of tools, equipment , etc. and carries a distinct and independent business and
undertakes to perform the job, work or service on its own manner and method, and free
from control and direction of the principal in all matters connected with the performance of
the work except as to the results thereof (Escasinas v. Shangri-la„s Mactan Island Resort, 580
SCRA 344 [2009])